The grey building on Bahadur Shah Zafar Marg, New Delhi's Fleet Street, is built like a cuboid. The small parking lot in front is cramped with cars and bikes throughout the day. There is a Metro station coming up across the road. The broad staircase leads to a lobby.

At its end, there is a giant-sized black-and-white photograph of Jawaharlal Nehru, the first prime minister of India. His photograph is here because this is Herald House, the headquarters of National Herald, the newspaper Nehru had started in 1937. This seven-storey building is now at the centre of a huge controversy that involves Sonia Gandhi, Rahul Gandhi, the Congress and sundry others, and was uncovered by Subramanian Swamy, Janata Party president, former Harvard professor, ultra-rightist and old foe of the Gandhi family.

This prime property, Swami has alleged and the Congress has admitted, belongs to a company called Young Indian that is owned 76 per cent by Sonia and Rahul. The real estate on Young Indian's books (it also owns assets in other places like Lucknow, Mumbai, Patna and Bhopal), Swami says, is worth Rs 1,600 crore. Real estate consultants value Herald House at Rs 300-400 crore. Janardan Dwivedi, the Congress spokesperson, has said that Young Indian is a "not for profit" company and, by implication, the allegation that the first family of Indian politics did things surreptitiously for personal gain is humbug.

Nehru had incorporated a company called The Associated Journals Ltd on November 19, 1937, the day his beloved daughter, Indira Priyadarshini, had turned 20. It had paid-up capital of Rs 500,000, 2,000 preference shares of Rs 100 each (carrying a fixed but non-cumulative dividend of 5 per cent) and 30,000 ordinary shares of Rs 10 each.

The objective of the company, said its memorandum of association, was to "establish and to carry on in the United Provinces (now Uttar Pradesh) and elsewhere the business of news agency, newspaper and magazine". The signatories included Congress heavyweights like Nehru, Purushottamdas Tandon, Kailash Nath Katju and Rafi Ahmad Kidwai. The document was witnessed by Govind Ballabh Pant. Three newspapers were published by The Associated Journals: National Herald in English, Qaumi Awaaz in Urdu and Navjeevan in Hindi.

According to one account, Ramkrishna Dalmia, once India's third-richest industrialist after JRD Tata and GD Birla, self-proclaimed expert on international affairs, protector of the holy cow and husband to no less than six wives, had invested Rs 10,000 in Nehru's newspaper. Dalmia and Nehru put their sons-in-law, Sahu Shanti Prasad Jain and Feroze Gandhi, respectively, on the newspaper's board of directors. The venture required more and more money. The two began to bicker, and Dalmia left in a huff. "He is an ugly man with an ugly face and an ugly mind and an ugly heart," Nehru would say of him. Dalmia, in turn, blamed Nehru for the plight of Hindus during Partition, amongst other things.

Over the years, the equity capital of The Associated Journals expanded significantly. In 2008, according to information available with the corporate affairs ministry, Janhit Nidhi, a trust, was the largest shareholder with 2,62,411 shares, followed by Delhi-based Deeksha Holdings (100,000 shares) and Mumbai-based Abhim Investments (100,000 shares). The address of Abhim Investments is interesting: Pratiksha, 10th road, Juhu Scheme, "Bombay" -- the residence of Amitabh Bachchan. Mohan Meakin Breweries, of the group that produces Old Monk rum, owned 5,000 shares. State-owned Life Insurance Corporation of India held 800 preference shares. (Nehru owned only three preference shares of The Associated Journals. Daughter Indira owned 50 equity shares, while her husband, Feroze Gandhi, owned 10.)

Things took a curious turn in November 2010 when Sonia, Rahul, Congress treasurer Motilal Vora (also the chairman of The Associated Journals) and party leader Oscar Fernandes floated a not-for-profit company called Young Indian with a capital of Rs 5 lakh. While Sonia and Rahul owned 38 per cent each, Vora and Fernandes took 12 per cent stake each. A month later, on December 21, the directors of The Associated Journals, which included Vora and Fernandes, authorised assigning the company's loans to Young Indian for a consideration of Rs 50 lakh. Technocrat Sam Pitroda and journalist Suman Dubey, old Gandhi family loyalists, were appointed on the board of The Associated Journals on the same day. The transaction of the liability was approved by the shareholders of The Associated Journals in an extraordinary general meeting on January 21, 2011 in Lucknow. The shareholders, on that day, also approved the allotment of 90.2 million shares at Rs 10 each to Young Indian. With this, the paid up capital of The Associated Journals zoomed from Rs 93 lakh to over Rs 91 crore. Young Indian came to own 98.97 per cent of the company; the remaining 1,088 shareholders were reduced to a minority.

The proposal met with some resistance at the EGM. Ishrat Ali Siddiqui, 93, a shareholder and the former chief editor of Qaumi Awaaz, accused the board members of "having no intention of reviving National Herald" (it had shut down in 2008) and selling away all the real estate of the company. Chairman Vora rushed in to reassure him that the real estate was intact and the company "definitely intended to restart the paper". But Siddiqui wasn't convinced. When the next meeting of the shareholders was held in New Delhi on September 26, he decided to skip it. "It makes me angry today to see all that is happening," says he. "The Associated Journals was never envisioned as a business proposition." Vikram Rao, the son of National Herald's first editor, K Rama Rao, and the president of the Uttar Pradesh Working Journalists' Union, says the newspaper should be restarted soon because the Congress needs a "mouthpiece to revive its sagging fortunes in Uttar Pradesh". Some years back, he claims to have met Sonia and Salman Khurshid (the then chief of the Uttar Pradesh Congress Committee) to request them to restart the newspaper, but nothing came out of it.

In spite of the strong Congress connections, National Herald always prided itself on its editorial independence. For instance, in the 1967 elections, remembers Haseeb Siddiqi, former chief reporter of Navjeevan, it had supported an independent candidate, A N Mullah, and not the Congress candidate, B R Mohan of Mohan Meakins, for the Lucknow seat because it "didn't want to throw its weight behind a liquor baron". Even when Sanjay Gandhi was at the peak of his power, the newspaper made it a policy not to carry his photograph. Trouble started after Emergency, in 1978, when there was an 18-month lockout. When the paper reopened, Yashpal Kapoor, an old confidant of Indira, became the managing director of The Associated Journals. This was the time when the company bought real estate in various cities. Kapoor left after Indira died in 1984. Another lockout followed. Rajiv Gandhi was keen to revive the newspaper and brought in Rameshwar Thakur as the managing director. "He assured us when we met him at Rae Bareli that he wanted to make National Herald the number one newspaper of India," claims Siddiqi.

Rajiv's death in 1991 plunged the newspaper into gloom. On January 18, 1999, the employees of The Associated Journals went to court demanding payment of arrears. Clearly, the company's finances were in bad shape. Its 2004-05 accounts, the earliest available in online filings, say the company closed the year with a loss of Rs 78.7 lakh, which took its accumulated losses to around Rs 27 crore. That Vora, the Congress treasurer, had been running the company since 2002 doesn't seem to have helped. In 2005-06, the staff costs jumped to Rs 15.64 crore (from Rs 4 crore in the previous year), resulting in a loss of Rs 13.3 crore. This could have been caused by a settlement with some employees.

By 2008, the paper had to shut down, perhaps because it was unable to sustain the loss-making operations. Another big settlement seems to have happened in 2009. In its profit and loss account filed on October 13, 2009, the company showed expenditure under the head salaries, wages and bonus as Rs 34.19 crore. This could be the final settlement of dues of 700 employees because the next year's statement draws a blank against the salaries and wages column.

It seems that the Congress, of which Sonia is the president, had been lending unsecured interest-free loans to The Associated Journals to meet its various liabilities towards employees and other creditors over a period of time. In 2009, when the final settlement with the 700 workers happened, the company's unsecured loans almost doubled to Rs 78.20 crore from Rs 39.22 crore in the previous year. Though there is no reference to the Congress in The Associated Journals' books, from the party's statements it appears that these were "interest-free loans" given purely on "emotional" grounds to keep the loss-making venture afloat. The income tax returns of the Congress for the year ended March 2011 shows an item of "balance written off" in the expenditure column: Rs 89.71 crore. Even for a large income statement like the Congress's, this amount sticks out. Though the return does not give further details of this sum, it neatly fits into the Young Indian-The Associated Journals transaction. According to the notes to Young Indian's accounts for 2011-12, it had acquired loans of Rs 90.21 crore owed by The Associated Journals, "presently engaged in achieving a recast of its activities so as to have its main object congruent to the main object of the company (sic)," for Rs 50 lakh. The difference between the two is Rs 89.71 crore -- the amount written off by the Congress.

The money belongs to the Congress, and it can be argued that it is free to do what it wants to do with it. But there is more to it. Earlier this year, The Associated Journals let out parts of Herald House to TCS, which runs a passport service centre from here. Syndicate Bank, The Associated Journals' banker, offers a product called SyndRent wherein it lends against receivable rental incomes. In June, the company availed a loan of Rs 2.5 crore under SyndRent for which a charge was created on Herald House. This loan was "repayable in six months from the date of disbursement in six installments of Rs 41.66 lakh. The final installment was due next month, on December 7. The monthly interest on loan was to be serviced separately. On October 15, a few days after The Pioneer broke the story, The Associated Journals settled this loan almost two months ahead of due date. Email sent to a TCS spokesperson remained unanswered.

This gives some idea of the value of Herald House. According to SyndRent rules, up to 75 per cent of the rent receivables can be availed as loan. This would mean The Associated Journals earns rent of at least Rs 60 lakh per month, or Rs 7.2 crore per annum. In downtown Delhi, where Herald House is located, annual rental income amounts to around 3 per cent of a property's value. This would value the property at Rs 240 crore. In the company's books, the net fixed assets were valued at a paltry Rs 1.68 crore on March 31, 2010. There is, therefore, a windfall waiting to be booked.